Ofgem warns Scottish Power and Utilita over customer protections
Ofgem has slapped two of the UK’s leading energy firms with provisional orders, requiring them to meet requirements to customers following a “series of apparent failings.”
The watchdog issued provisional orders to Utilita and Scottish Power this month, compelling the two energy firms to do more to protect customers in challenging circumstances.
The orders relate to issues Ofgem has raised with Utilita’s levels of support for vulnerable customers and Scottish Power’s debt repayment plans.
The two provisional orders come ahead of the published findings of a full market review into how suppliers make sure they are supporting customers struggling with bills, which Ofgem expects to be released shortly – although no date has yet been announced.
Cathryn Scott, Ofgem Enforcement and Emerging Issues Director said: “These orders to Utilita and Scottish Power are a clear signal to suppliers about the vital importance of protecting customers.
The rise in cost of living is an increasingly important public issue, and we expect urgent and immediate action on the points raised, as well as constructive engagement with Ofgem during the process. Suppliers must consider a customer’s vulnerability and ability to pay to a closer degree, particularly with what is likely to be a very challenging winter for many.”
This comes with energy customers facing a serious cost of living crisis, with the Government announcing a historic intervention in the market to cap energy bills for two years.
Energy suppliers hit with demands from Ofgem to improve protections for customers
Following a review conducted by Ofgem found a number of failings in the way Utilita has been dealing with all customers, including both vulnerable customers on the Priority Services Register (PSR) and customers in debt.
Utilita has been ordered to comply with its licence conditions that govern additional support credit, and ensure that pre-payment meters (PPMs) are safe and practicable for its customers.
It is now required to cease the use of call scripts which tells customers that additional support credit is not a licence requirement.
The supplier also has to take ability to pay into account for all repayment plan calculations and on each occasion additional support credit is offered, calculate the instalments for repayment.
Utilita must also provide Ofgem with an independent audit confirming its compliance with the other aspects of the Provisional Order by October 31.
Meanwhile, Ofgem has determined that Scottish Power has experienced a number of failings around the way it sets debt repayment plans and deals with customers struggling with bills.
Scottish Power has been told it must comply with the relevant licence conditions that govern its conduct in this area.
It is now required to pause disconnections for those customers with active, agreed or overdue repayment plans of £5 per week or below.
The Big Five supplier will also have to update all call scripts, training materials, policies, communications with customers and provide training for company staff, to ensure they reflect that there is no default minimum repayment amount when sufficient information is available on a customer’s ability to pay.
It will also have commission an independent audit of its own processes to assess whether they have been effectively implemented and provide the report to Ofgem by no later than 31 October 2022.
The Provisional Order for Utilita was issued on Friday 9 September 2022 and for Scottish Power was issued on Wednesday 21 September 2022.
When approached for comment, a Scottish Power spokesperson said: “We’re disappointed that all of the effort our staff make to help our customers manage affordability challenges has resulted in this conclusion from Ofgem. We will now work with Ofgem to implement their recommendations.”
City PM has also reached out to Utilita for comment.